Pitching Private Medicare Plans An Analysis of Medicare Advantage by xak10506

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									P I TC H I N G P R I VAT E M E D I C A R E P L A N S

                 An Analysis of Medicare Advantage
              and Prescription Drug Plan Advertising

                                      SEPTEMBER 2008
P I TC H I N G P R I VAT E M E D I C A R E P L A N S

                 An Analysis of Medicare Advantage
              and Prescription Drug Plan Advertising

                                          SEPTEMBER 2008




                                                  PrePared by:



                      Xiaomei Cai, Gary Kreps, Jim McAuley,
                                        and Xiaoquan Zhao
                                    George Mason University

                                                          and



                   Michelle Kitchman Strollo, Tricia Neuman,
                                             and Kim Boortz
                                   Kaiser Family Foundation
ExEcutivE Summary

With private health plans playing an increasingly prominent role in Medicare, insurance companies are actively
competing for enrollees, relying on advertising campaigns and other marketing activities to attract Medicare
beneficiaries. The number of Medicare advantage and Medicare Prescription drug Plans offered throughout
the country continues to rise presenting both opportunities and challenges for the 44 million people on
Medicare. as Medicare beneficiaries are asked to consider their options and choose among plans to meet
their individual needs, insurers have become a leading source of information, using advertising and other
marketing activities to inform consumers’ health insurance choices.

To understand more about the role of advertising in an environment with substantially more health plan
choices offered under Medicare, and to assess how health insurers used advertising to influence beneficiaries’
decisions, we monitored television, print, and radio ads for private Medicare plans during the 3-month period
between October st and december 3st 2007 leading up to the 2008 plan year. We analyzed Medicare private
plan ads identified by VMS, a media monitoring service, that were placed nationally and in three markets:
Miami/Fort Lauderdale, Florida; Phoenix, arizona; and Greensboro, north Carolina. The analysis is based on
77 unique ads which collectively appeared 3,40 times during the 3-month period.

KEy FindingS

Extra benefits and low/no premiums topped the list of messages promoted in Medicare plan ads, with
variation by plan type.

      •     extra benefits (mainly vision, preventive care, and hearing benefits) were promoted in the majority
            (7%) of all Medicare advantage plan ad occurrences.

      •     The promise of having no premiums was prominent in Medicare advantage plan ads (56%); just
            8 percent of Medicare Prescription drug Plan ads mention premiums at all.

      •     Medicare Prescription drug Plan ads emphasized access to pharmacies (99%), coverage of generic
            drugs (82%), and no drug deductible (82%); drug benefits received less attention in ads for Medicare
            advantage plans.

      •     nearly a quarter (22%) of all ad occurrences and a third (32%) of Medicare advantage ad occurrences
            claimed to have better benefits than Original Medicare.

the majority of medicare plan ad occurrences did not convey basic, descriptive information defined in
this study to include both plan type and premium amount; among print ads, important information
was often conveyed in fine print.

      •     More than half (58%) of all ad occurrences for Medicare plans did not include information about both
            plan type and monthly premiums.

      •     among Medicare advantage ads, 2 percent (2% television and 24% print) did not identify a specific
            plan type (e.g., HMO or PPO).

                •    However, among the majority of Medicare advantage print ads that did indicate specific plan type,
                     nearly half (46%) did so in fine print.




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EXECuTIVE SuMMARy




    •    Two-thirds (67%) of all Medicare advantage print ad occurrences included a general statement
         indicating restrictions and limitations may apply.

            •   However, in every case, this information was presented in fine print.

            •   none of the HMO print occurrences included the Centers for Medicare and Medicaid Services (CMS)-
                suggested language regarding network restrictions which could be important for beneficiaries with
                established relationships with certain doctors or specialists.

Medicare plan sponsors appeared to be reaching out to racial/ethnic minority beneficiaries; however,
they did not appear to focus their advertising efforts on certain segments of the Medicare population
— particularly the under-65 disabled and seniors with chronic conditions or frailties.

    •    racial and ethnic minority beneficiaries were represented in more than half of all ad occurrences that
         contained images.

    •    Less than one percent of ad occurrences for Medicare plans explicitly mentioned the under-65
         disabled on Medicare; just three percent included images of people who appeared to be under 65
         with disabilities.

    •    none of the ads included images of seniors who appeared to be sick or physically frail (e.g., using a
         walker or cane); only 4 percent of all ad occurrences included images of prescription drugs.

    •    nine percent of all ad occurrences featured people engaged in physically demanding activities, such as
         dancing, running, playing baseball and swimming. These images may appeal to beneficiaries’ aspirations
         for a healthy, active lifestyle, but could deter those persons with more serious health conditions from
         enrolling if they feel the plan is not suitable for people in poor health.

Insurers devoted substantially more advertising resources to promote Medicare Advantage plans than
Medicare Prescription Drug Plans.

    •    Insurers placed three times more Medicare advantage plan ads than Medicare Prescription drug plan
         ads, between October  and december 3, 2007.

    •    Insurers are estimated to have spent more than twice the amount for Medicare advantage plan ads
         than for Medicare Prescription drug Plan ads ($30. million vs. $3.7 million) — based on ads placed
         nationally and in the three study markets.

diScuSSion

Findings from this study provide new insights that help explain how health insurers attempt to inform and
influence Medicare beneficiaries’ health coverage decisions through advertising. First, as expected, extra
benefits and dollar savings topped the list of leading messages used to attract consumers, suggesting that
health insurers recognize the importance of savings for Medicare beneficiaries who generally live on fixed
incomes and are often concerned about the financial burden of medical care. Second, ads for Medicare plans
tend to include fairly minimal descriptive information to help inform health insurance choices, often omitting
important plan features that could significantly affect beneficiaries’ access to medical providers and out-of-
pocket spending. Third, consistent with prior research, insurers tend to devote relatively little advertising
attention to certain segments of the Medicare population, such as the under-65 disabled and seniors with



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                                                                                                                                                              EXECuTIVE SuMMARy




serious medical needs, groups for whom health insurance choices are especially important. and finally,
Medicare plan sponsors devoted substantially more advertising dollars to Medicare advantage plans than to
Medicare Prescription drug Plans, which may reflect a decision to maximize enrollment among plans that are
relatively profitable under the current payment system.

Together, these findings raise, but do not answer, important questions about the appropriate role of
advertising within the context of the Medicare program. Given the emergence of private plans in Medicare,
the strong influence of advertising on consumer behavior, the physical and cognitive limitations of many
people on Medicare, and the fact that most products advertised by Medicare insurers are paid for primarily
by the federal government, the advertising activities of Medicare insurers remain an important matter for
policymakers. Policymakers may want to consider the extent to which ads for Medicare plans could or should
be used more effectively to educate consumers about key plan features, and to reach out to all segments of
the Medicare population.




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introduction

Private health insurers are playing an increasingly prominent role in the Medicare program, offering a range of
plans and benefits to serve the Medicare population. Since the implementation of the Medicare drug benefit
in 2006, a record number of health insurance companies have contracted with the federal government to
offer drug coverage. Furthermore, the number and variety of Medicare advantage plans offered throughout
the country have grown substantially over the past several years.2 Government analysts predict continued
enrollment growth in private plans for Medicare beneficiaries over the next decade,3 while Wall Street analysts
forecast strong enrollment as earnings grow for insurers who sponsor Medicare products in the near-term.4
The proliferation of private health plans under Medicare is fundamentally changing the coverage landscape
for people on Medicare, posing new challenges and opportunities for beneficiaries and raising important
questions for policymakers.

With increasing competition for market share, insurers rely on advertising and other marketing activities
to help attract new Medicare members and retain existing enrollees. Given the potential to expand market
share to as many as 44 million Medicare beneficiaries, and with favorable government payment policies
particularly for Medicare advantage plans, insurers are using a range of strategies to raise Medicare beneficiary
awareness about their offerings and to attract potential enrollees to their plans. These strategies include
mass media advertising through TV, newspaper, and radio; seminars and sponsored events; direct mail;
web-based marketing; and agent outreach. Many insurers hire consultants and marketing experts to help
them implement marketing strategies to maximize their Medicare enrollment.5

as marketing activities have intensified, so too have concerns about questionable marketing practices and
the potential implications for Medicare beneficiaries.6 Policymakers and consumer advocates have raised
questions about excessively aggressive and misleading sales practices that may result in beneficiaries
signing up for a plan without fully understanding whether it is appropriate for them, given their individual
circumstances.7,8 In addition, some analysts are concerned that insurers’ marketing practices target healthy,
lower-cost beneficiaries rather than sick, high-cost beneficiaries, or fail to reach key subgroups of the Medicare
population, such as those who are under age 65 with disabilities.9 In response to some of these concerns,
policymakers have proposed new marketing requirements to strengthen consumer protections and prohibit
certain sales and marketing activities.0,,2

With a fairly robust marketplace, the expectation is that beneficiaries will seek information, compare the
various options offered in their area and choose an optimal plan, using information and tools provided by the
government, health insurers, and trusted advisors, such as family members and friends. However, in practice,
this task can be more challenging than it appears, particularly given the complexity of the health insurance
marketplace with the vast array of options available to seniors in most parts of the country. Previous research
indicates that beneficiaries lack even basic knowledge and understanding about their Medicare coverage, let
alone important distinctions between different plan offerings available to them.3 Seniors say they rely on
advice from friends and family for help with their Medicare decisions and prefer to have fewer choices and
greater simplicity with regard to their health care coverage.4

Insurers play a key role in providing information about Medicare plan options to consumers. a substantial
share of Part d enrollees say they rely on insurers for information about plans, even though many indicate that
they feel overwhelmed by the volume of information and marketing materials from plan sponsors and are
anxious about aggressive sales tactics.5 an important consideration is the extent to which advertising can or
should be used to inform the beneficiary decision-making process.




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INTRoDuCTIoN




researchers have examined effective strategies for reaching seniors through advertising and other marketing
activities because they are a target market for a number of products, like pharmaceuticals and health
insurance. Studies show that older people tend to remember messages that are emotionally meaningful
and have the potential for a relatively immediate, versus long-term return.6 When elderly and near-elderly
Medicare beneficiaries and their family caregivers were presented with informational Medicare materials,
they responded positively to ads that conveyed a sense of helping a person to help him or herself (promoting
independence) and to ads that addressed seniors’ questions about common health concerns.7 In addition,
seniors tend to be particularly dependent on television as a primary source for information, suggesting the
potentially strong reach of televised messages for marketing to this audience.8

This study examines ads placed by Medicare insurers to assess how they attempt to influence beneficiary
choice. The study addresses four key questions:

    ) What main messages were used by Medicare insurers to attract enrollees, and did they vary by market or
       plan type?
    2) What basic descriptive information is conveyed in ads?
    3) did ads represent different segments of the Medicare population (e.g., healthy and sick)?
    4) Were certain types of Medicare plans promoted more aggressively than others, and to what extent did
       strategy vary by market?




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mEtHodS

ads for private Medicare plans were monitored and analyzed between October , 2007 and december 3,
2007, the period during which Medicare plans were permitted to market to people on Medicare for coverage
in 2008. a multi-stage data-gathering strategy was employed to identify newspaper, radio and television ads.
VMS, a commercial media monitoring service, was retained to monitor and record print, radio and television
ads that appeared nationally and in three media markets (Phoenix, aZ; Miami/Fort Lauderdale, FL, and
Greensboro, nC). For a detailed description of the methodology, see appendix a.

The three study markets were selected for their geographical diversity, the number of Medicare beneficiaries
living in the area, and the number of beneficiaries enrolled in Medicare advantage plans. In 2007, the
Miami/Fort Lauderdale/Miami beach area had more than 850,000 Medicare beneficiaries — far more than the
number living in the Phoenix area (nearly 500,000) and substantially more than were living in Greensboro, nC,
Miami/Fort Lauderdale, FL and Phoenix, aZ are relatively mature markets, with higher than average Medicare
advantage penetration rates (39%), while Greensboro, nC is considered an emerging Medicare advantage
market, with a different mix of plans (more Private Fee-for-Service plans than found in other cities) (Table 1).


                                                                               taBLE 1: Features of three markets

                                                                              miami/ Fort Lauderdale, FL                       Phoenix, aZ                         greensboro, nc
          Medicare beneficiaries, 2006                                                      850,64                             468,725                                04,78
          Medicare advantage enrollment, 2007                                               333,069                             83,599                                  32,098
          Medicare advantage enrollment, 2002                                               337,03                             66,070                                   8,742
          Medicare advantage Plans, 2008                                                            94                              6                                        60
             HMO Plans, 2008                                                                        56                              9                                        
             PPO Plans, 2008                                                                          7                              7                                          5
             Private Fee-for-Service Plans, 2008                                                    27                              33                                        42
             Medical Savings accounts, 2008                                                                                         2                                          2
             Provider-Sponsored Organizations, 2008                                                   3                              0                                          0
          Stand-alone Prescription drug Plans, 2008                                                 58                              5                                        52

          nOTeS: The Medicare advantage plans were determined using the Center for Medicare and Medicaid Services (CMS) Medicare Compare and a zip code from each market.
                 MSas are defined as Miami/Fort Lauderdale/Miami beach; Phoenix/Scottsdale/Mesa; and Greensboro/High Point.
          SOUrCe: Kaiser Family Foundation, Medicare Health and Prescription Drug Plan Tracker, http://www.kff.org/medicare/healthplantracker/




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METHoDS




VMS monitored seven broadcast networks, 65 cable networks, 45 newspapers, and  magazines in the three
markets, and 48 local radio stations in Phoenix, aZ and Miami/Fort Lauderdale, FL (See appendix Table a).
VMS identified and recorded 24 distinct newspaper/magazine ads, 50 distinct television ads, and three
distinct radio ads sponsored by private Medicare plans. They also provided the frequency for which each
distinct ad appeared nationally and in the three media markets (“occurrences”), and an estimate of the costs
associated with each occurrence.

a content coding sheet was developed to document and assess the key elements of advertising content:
marketing strategy; eligibility requirements; benefits, financial costs, and restrictions; ways to establish contact
with the plan; and images presented in the ads. The coding sheet was designed to capture the presence or
absence of specific elements, thus minimizing the need for qualitative judgments (coding sheet is available
from authors, by request). Three researchers coded all ads for content and imagery; inter-rater reliability for
these categories exceeded 95 percent. Variables from the content coding sheet were used to create composite
summary variables to define main messages (See appendix Table a3).

In addition, each ad was coded for general plan type (e.g., Prescription drug Plan, Medicare advantage
plan, Medigap); ads promoting Medicare advantage plans were coded for specific plan type (e.g., Health
Maintenance Organizations (HMOs), Preferred Provider Organizations (PPO), Private Fee-for-Service (PFFS)).
For the purpose of determining whether basic information was conveyed in ads, coders looked for plan type
by viewing, reading and/or listening to ads. Using this approach, 6 of the 77 unique ads in the sample had
no plan type identifier. To accommodate more detailed analyses of content, message, and images by plan
type, we took an additional step to identify plan type by searching the plan’s name by market area using the
Medicare Compare web tool on the Medicare.gov website. We were able to identify plan types for another nine
of 6 unique ads for which plan type could not be identified by coders without Medicare Compare, leaving
seven unique ads unidentified as to the type of plan advertised.

all data were entered into a Statistical Package for the Social Sciences (SPSS) database for tabulation and
analysis. Since VMS monitored all major television, print, and (with the exception of Greensboro, nC) radio
outlets in the three markets, the data presented in this report more closely reflect true population values
rather than sample values. In light of this, we do not report statistical significance tests in presentation of
cross-market analysis because significance testing is generally only meaningful in analyzing sample data.

Limitations. The study does not include the total universe of television, radio, and print ads. due to resource
constraints, we focused on ads that appeared nationally and in the three markets, thus excluding non-national
ads that may have appeared in other local markets throughout the country. In addition, the sample included
all major TV and print outlets in each of the three markets and nationally, but not the universe. Second, radio
ads were not captured in each of the three markets because a radio monitoring service was not available in
Greensboro, nC. However, based on our other two markets, we found that radio was not a major outlet for
Medicare plan advertising. Third, we were not able to capture all marketing venues used by insurers, including
web-based, outdoor, direct-mail, and marketing seminar-delivered advertisements. Thus, the research does
not speak to all avenues of marketing, but provides robust data to assess ads from TV, print, and radio (to
the extent these communication channels were used). Lastly, spending data are based on estimates of the
commercial value of each ad placement, rather than actual expenditures by ad sponsors because those were
the best data available to document spending levels. We have no reason to believe these limitations biased
study results in any way.




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                                                                                                                                                                                                METHoDS




adS anaLyZEd

We analyzed 77 unique Medicare health plan ads that were placed during the study period, between
October , 2007 and december 3, 2007, the three-month period prior to the 2008 plan year (Table 2). Just
over 0 percent of these ads ran in markets across the country (national ads) while the others appeared in
at least one of three main study markets (Miami/Fort Lauderdale, FL, Greensboro, nC and Phoenix, aZ). The
majority of unique ads captured in the sample were newspaper ads (24), followed by television (50) and radio
(three). The total includes 38 ads in Spanish ( television, 26 print, and one radio ad).

This study focuses on the number of ad placements (referred to throughout as “occurrences”), rather than the
number of unique ads, to give greater weight to ads that appeared more frequently than to ads that appeared
just once or only a few times. This approach is preferable for understanding beneficiaries’ potential exposure
to advertising in their market. The 77 unique ads in the sample accounted for 3,40 ad occurrences that
appeared nationally and in the three target markets. The vast majority of occurrences (97%) were television
ads. eight percent of all ad occurrences were in Spanish, most of which were in Miami/Fort Lauderdale, FL.



                          taBLE 2: number of Sample medicare ads, by medium and market, oct. 1 – dec. 31, 2007
                                                                                                 miami/Fort
                                                                   national                    Lauderdale, FL                  greensboro, nc          Phoenix, aZ                     total
                                                                                              uniquE mEdicarE adS
          TV                                                             6                               22                         0                        20                         50
          Print                                                            4                              9                         0                        26                       24
          radio                                                            0                                                         0                         2                          3
          totaL                                                          20                             4                          20                        48                       77
                                                                                         mEdicarE ad occurrEncES
          TV                                                         7,485                           ,867                         ,50                   ,908                     2,76
          Print                                                            6                            277                          25                        43                       35
          radio                                                            0                              23                          0                         5                         28
          totaL                                                      7,49                           2,67                         ,526                   ,956                     3,40
          grand totaL (Per market)*                                                                  9,658                         9,07                   9,447

          nOTe: rows do not sum to total because ads may appear in multiple markets. Total is an unduplicated count of unique ads in the sample, including revisions.
          * Grand totals for each of the three markets include national occurrences.
          SOUrCe: Kaiser/George Mason University analysis of VMS data, 2008.




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r E S u Lt S


i. main messages used to Pitch medicare Plan ads

Insurers pitched a variety of messages to promote their products and attract potential new enrollees.
However, two overarching themes ran through the advertisements. The first was an appeal to Medicare
consumers’ perceived interest
and desire to get good value for
                                             ExHiBit 1
their dollars, with a focus on extra
benefits, low costs, and savings. The                    Top Messages in TV, Print, and Radio Ads for All Medicare Ads
                                                                                 (National and Three Markets)
second theme was a more emotion-
                                             Percent of ad occurrences with the following messages:
based appeal, tapping into Medicare
                                                                      Extra Bene ts                                                                                              50%
consumers’ positive association                                Low or No Premium                                               43%
with choice yet appealing to their                               Brand Recognition                                            42%

desire for less confusion and greater                               Variety of Plans                                        39%
                                                                  Predictable Costs                                      37%
simplification. both themes were                                Access to Providers                                     36%
prominent across ad occurrences;                        Confusing/Need to Simplify                                      36%

though messages appealing to                                           Save Money                                      35%
                                                                    All-in-One Plan                                29%
consumers’ dollars-and-cents                                       Excellent Service                              28%
logic were most common overall                                    Low Cost-Sharing                               27%

(See appendix b for additional              Drug Coverage of Brands and Generics                                 27%
                                                  Comparison to Original Medicare                            22%
information).                                                 Access to Pharmacies                         20%
                                                                                 Low Drug Cost                                    18%
Extra Benefits. extra benefits
                                            SOURCE: Kaiser/George Mason University analysis of VMS data, 2008.
beyond what is covered by Original
Medicare was the leading message
overall featured in half (50%) of all
                                            ExHiBit 2
ad occurrences, and 7 percent of all
Medicare advantage ad occurrences                           Extra Bene ts Promoted in Medicare Advantage Plans
                                                                               (National and Three Markets)
(Exhibits 1 and 2). among ads for
                                            Percent of ad occurrences promoting extra bene ts:
Medicare advantage plans, vision
(38%), preventive care (26%),                                               Total                                   71%

and hearing (25%) were most                                                Vision                               38%

commonly cited. availability of                                   Preventive Care                           26%

health education and wellness                                            Hearing                           25%

programs (7%), coverage of                                   Wellness Programs                     17%
hearing aids (4%), and even health                                  Hearing Aids                14%
club memberships (4%) were                                             Eyeglasses          6%
also promoted as extra benefits.
                                                                           Dental         5%
Medicare law requires Medicare
                                                        Health Club Membership           4%
advantage plans to offer extra
                                                                   Transportation        4%
benefits above and beyond Original
Medicare when payments from the             SOURCE: Kaiser/George Mason University analysis of VMS data, 2008.

government exceed costs associated
with providing benefits covered
under Original Medicare. as a result, many Medicare advantage plans offer extra benefits and promote these
value-added services in their advertising materials.


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                                                                                                                                                                                               R E S U LT S




Enrollees Save Money. Low costs and out-of-pocket savings were messages featured prominently in Medicare
ads. Sponsors communicated this message by emphasizing several different plan features that offer enrollees
a “good deal,” with specific cost-saving features varying by plan type.

• Low/No Premiums. Low/no premiums were pitched in 43 percent of all ad occurrences. More than half
    (56%) of Medicare Advantage ad occurrences promoted having a zero premium (meaning the sponsor
    does not charge a premium for coverage) and four percent promoted having a “low” premium. None of
    the Medicare Prescription Drug Plans promoted either a zero premium or “low” monthly premium, and just
    18 percent stated the monthly premium (also see section on Key Facts and Information Conveyed in Ads).
    The Medicare Prescription Drug Plans may have been less likely to emphasize premiums because their
    premiums are typically higher than Medicare Advantage premiums.19

Examples of language used to convey this message in Medicare Advantage ads include: “Too good to be
true — not paying a premium and getting great benefits,” and “What’s better than a no-premium Medicare
Advantage plan?” Graphic images, such as an
over-sized $0 also drive home this message           Exhibit 3
(Exhibit 3).
                                                                                                                               Example of an Ad Promoting a Zero Premium Plan
• Saving Money. Recognizing the appeal to
    consumers of saving money on health care,
    more than a third of ad occurrences promoted
    cost savings, getting more for what you pay,
    or the affordability of coverage under the
    plan advertised. There was little difference
    between Medicare Drug Plans and Medicare
    Advantage plans. Specific phrases used to
    convey this message include, “pay less and
    get more.”

• Predictable Copayments and Costs. More
    than a third of ad occurrences promoted
    “predictable” copayments and costs, with a
    larger share observed in Medicare Advantage
    ads than in Medicare Prescription Drug Plans
    (47% vs. 22%). The term “predictable” when
    referring to costs may resonate well with                                                                     SOURCE: VMS, 2008.

    seniors who live on fixed incomes and who
    are looking to avoid unanticipated expenses.

• Low Cost-Sharing and Low Drug Costs. More than a quarter of ad occurrences (27%) promoted low cost-
    sharing, mainly among ads for Medicare Advantage plans indicating specific copayment amounts for certain
    health care services (21%) and to a lesser extent, “low” copayments for doctor visits and other health care
    services. Not surprisingly, messages pertaining to low drug costs, found in 18 percent of all ad occurrences,
    were more prominent in Medicare Prescription Drug Plan ads (82%).




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R E S U LT S




Choice, Confusion, and Simplification. Recognizing that the concept of choice tends to have a positive
connotation for Medicare consumers, nearly four in ten ad occurrences (39%) promoted the theme of choice.
For example, a print ad by Preferred Care Partners promoting its various product offerings says, “If you can
choose your favorite TV show, why not choose your favorite health plan? At Preferred Care Partners, you
have a choice!” (Exhibit 4). A TV ad from Colonial Penn’s Advantra Freedom plan emphasizes the concepts
of “freedom” and “choice” as an announcer asks, “Do you want freedom when it comes to your Medicare
Advantage plan?”

Still ad sponsors appear to recognize that                                 Exhibit 4
choice, while appealing in theory, may be
confusing and challenging for beneficiaries in                                                    Example of an Ad Highlighting Choice
practice. For example, one ad for a prescription
drug plan sponsored by AARP features seniors’
testimonials about confusion in navigating
drug coverage options with one senior saying,
“Medicare Part D plans can drive you up the
wall… Why does it have to be so frustrating? I
just want my medications.” More than a third
of ad occurrences tapped into this confusion
and proceeded to promote the ad sponsor’s
role in simplifying choice and offering simple,
easy-to-use plans. In addition, ten percent of
ad occurrences promoted sponsors’ capacity
to provide ease and “peace of mind.” These
findings suggests that plan sponsors are taking
into consideration older consumers’ desire for
simplicity that was so widely articulated during
the roll out of the Medicare drug benefit.20

Messages pertaining to choice and simplicity
of plans varied for Medicare drug plans and
Medicare Advantage plans. Medicare Drug
Plan ad occurrences were far more likely
than Medicare Advantage ad occurrences to
promote offering a variety of plan choices
(73% vs. 26%, respectively) and simplified
choice and/or simple to use plans (73% vs.
28%, respectively). Medicare Advantage ad
occurrences also tended to promote the all-
in-one benefits concept of their plans (43%),
another characteristic that may have been
used by plan sponsors to suggest simplicity
(Exhibit 5).
                                                                           SOURCE: VMS, 2008.




12       P I T C H I N G P R I VAT E M E D I C A R E P L A N S   A n A n a l y s i s o f M e d i c a r e A d v a n t a g e a n d Pr e s c r i p t i o n D r u g P l a n A d v e r t i s i n g
                                                                                                                                                                                                     R E S u LT S




Prescription Drugs. Messages                                                               ExHiBit 5
pertaining to prescription drug
coverage, including coverage of brand                                                                                            Main Messages by Plan Type
                                                                                                                                      (National and Three Markets)
and generic medications are, not
                                                                                           Percent of ad occurrences emphasizing message, by plan type:
surprisingly, far more common among
ads for Medicare drug Plans than ads                                                                               Medicare Advantage Plans:                               Medicare Prescription Drug Plans:
for Medicare advantage plans (82%                                                               Extra Bene ts                                    71%
                                                                                                                                                              Access to                                    91%
                                                                                                                                                            Pharmacies
vs. 2%). More than eight in ten drug                                                                Low or No
                                                                                                                                           56%             Rx Coverage                                82%
                                                                                                      Premium
plan ad occurrences pitched messages
                                                                                            Predictable Costs                         47%                Low Drug Cost                                82%
about coverage of generic medications
                                                                                                      Access to                                                  Brand
                                                                                                                                      46%
including unlimited generic drugs or                                                                  Providers                                           Recognition                              73%

                                                                                                                                                           Confusing/
no copayment for preferred generic                                                             All-in-One Plan                       43%
                                                                                                                                                       Need to Simplify
                                                                                                                                                                                                   73%

                                                                                                       Brand
drugs, while seven in ten drug plan                                                               Recognition                    38%                    Variety of Plans                          73%

ad occurrences featured messages                                                                  Save Money                    34%                    Excellent Service                   49%

about coverage of brand name drugs.                                                           Comparison to
                                                                                                                                32%
                                                                                                                                                        Mail Order
                                                                                                                                                                                    27%
                                                                                           Original Medicare                                      Pharmacy Services
In addition, nearly all drug plan ads                                                      Low Cost-Sharing                                                Save Money
                                                                                                                               29%                                                  27%
occurrences promoted access to                                                                   Confusing/                                              Comparison to
                                                                                                                               28%                                                 22%
                                                                                             Need to Simplify
pharmacies and more than a quarter                                                                                                                         Other Plans

promoted the availability of mail order                                                    NOTE: “Peace of Mind” and “Access to Providers” also were featured in 22% of prescription drug
pharmacy services, a feature that may                                                             plan ad occurrences.
                                                                                           SOURCE: Kaiser/George Mason University analysis of VMS data, 2008.
be appealing to enrollees who rely
on medications to manage chronic
conditions.

Access to Providers. access to providers is an important selling point for potential enrollees who tend to value
continuity and stability in their relationships with their doctors. It is also an important consideration for “snowbirds”
who spend a portion of the year in a location other than their permanent residence. More than one third (36%)
of ad occurrences featured messages pertaining to access to providers. recognizing the potential concern about
restricted access to providers, nearly half of Medicare advantage ad occurrences (46%) highlighted messages
such as freedom to choose doctors/no need to switch doctors (32%), large/broad network of doctors (3%), and
no referral to specialists needed (5%). by Medicare advantage plan type, PFFS and PPO plans (94% and 00%,
respectively) were far more likely than HMOs (29%) to promote messages about access to providers. One ad for a
PFFS plan by Humana told listeners “it is like no other plan you have seen before — it lets you choose your doctors.”
another ad for Colonial Penn’s advantra Freedom PFFS plan promoted provider access by allowing beneficiaries
“freedom to choose their own doctors,” a common theme observed among PFFS plan advertisements.

Brand Recognition. brand recognition was a feature promoted across all ad plan types (42%), though Medicare
drug Plan ad occurrences were more likely than Medicare advantage ad occurrences to promote a company
brand name that is well known and trusted (73% vs. 40%, respectively). It is important to note, however,
that nearly all ad occurrences promoting brand recognition were from one health insurer (aarP/United
Healthcare). aarP may be uniquely positioned to build on its reputation and favorable branding with the
senior population to promote their insurance products.




A n A n a l y s i s o f M e d i c a r e A d v a n t a g e a n d Pr e s c r i p t i o n D r u g P l a n A d v e r t i s i n g                       P I T C H I N G P R I VAT E M E D I C A R E P L A N S       3
R E S u LT S




Comparison to Original Medicare and Other Plans. Comparisons with the Original Medicare fee-for-service
program or other competing plans were used by some plan sponsors to set themselves apart (Exhibit 6). nearly
a quarter of ad occurrences (22%) promoted better benefits in comparison to Original Medicare, and another
eight percent did so in comparison with other plans. nearly a third of Medicare advantage ad occurrences
(32%) indicated that the plan(s) featured in the ads were more favorable than Original Medicare. Comparisons
with Original Medicare are especially relevant to Medicare advantage Plans which appear to be attempting
to grow their market share by drawing enrollment from the Original Medicare program. One ad for Humana
Plan Choice, a PFFS plan, featured
a senior explaining that the plan
                                             ExHiBit 6
is like no other plan he has seen
before, “ …it gives you benefits                         Example of an Ad Comparing to original Medicare
beyond Original Medicare.”

by contrast, Medicare Prescription
drug Plan ads were more likely
to position themselves relative
to other competing drug plans
with nearly a quarter (22%) of
drug plan ad occurrences having
promoted better benefits than
other plans. Many ad occurrences
for Prescription drug Plans
involved seniors talking about
their Medicare Prescription drug
Plan and how it “covers more of my
medications” than other plans.

Excellent Service. excellent service
was promoted in more than a                   SOUrCe: VMS, 2008.

quarter (28%) of all ad occurrences,
but Medicare drug Plan ads were
about twice as likely as Medicare advantage ads to feature messages pertaining to service (49% vs. 24%). In
particular, a long history of service in Medicare or experience serving Medicare enrollees was emphasized in
a quarter of ad occurrences overall, with nearly half of drug plan ad occurrences and one fifth of Medicare
advantage ad occurrences promoting this message. These findings suggest that drug plan sponsors are
more apt to use their experience with Medicare to bolster their reputation, while Medicare advantage plans,
as noted above, appear more likely to pit themselves against Medicare to boost their standing with potential
enrollees.

Savings for People with Limited Incomes. There are substantial government subsidies available for low-income
people who have drug coverage through a Medicare Part d plan. Only nine percent of Medicare advantage
ad occurrences promoted this benefit and no stand-alone Medicare drug Plans did so. The few ads that
promoted a message about low-income assistance could serve as a model for other plan sponsors to follow
to educate low-income beneficiaries about the low-income subsidy. For example, the narrator in an ad for
aarP Medicare Complete provided through Secure Horizons says, “Find out if this plan is right for you. you
may even qualify for low-income assistance” as the 800-number appears prominently along the bottom of the
screen. a simple message like this could help direct low-income beneficiaries to much needed assistance with
their drug costs.


4       P I T C H I N G P R I VAT E M E D I C A R E P L A N S   A n A n a l y s i s o f M e d i c a r e A d v a n t a g e a n d Pr e s c r i p t i o n D r u g P l a n A d v e r t i s i n g
                                                                                                                                                                                                        R E S u LT S




ii. Key Facts and information conveyed in ads

advertisements are one among many sources of information consumers use to make purchasing decisions
about health coverage. Insurers may have limited ability to convey basic information about their plans in
advertisements due to constraints
associated with space (print) and time         ExHiBit 7
(television); nonetheless, certain key facts
                                                       Distribution of Ad Occurrences with Minimal Information
and information about plans could help                                  (Plan Type and Premium)
to educate consumers and inform their                                    (National and Three Markets)
decisions. Therefore, we analyzed ads to
                                                                           Neither Plan Type nor Premium
assess the extent to which they conveyed                                                 2%
information about the advertised plan,
focusing on two key elements thought to
be critical to consumer plan choice: plan
type and premium.                                                       Both Plan Type
                                                                                                                                            and Premium
                                                                                                                                                42%
Presence of Basic Information Regarding                                                                                                                        Plan Type Only
                                                                                                                                                                    56%
Plan Type and Premium. Overall, 42
percent of all ad occurrences explicitly
provided information on both plan
type (e.g., Medicare advantage plan or
                                                                                                                                           Premium Only
Prescription drug Plan) and monthly                                                                                                            <1%

premium in the text or narration of the
ad (Exhibit 7). More than half of all ad                                                             SOURCE: Kaiser/George Mason University analysis of VMS data, 2008.

occurrences identified plan type only
(56%), but not premium amount, while
                                                                                                    ExHiBit 8
less than one percent conveyed monthly
premium but nothing about plan type.                                                                             Distribution of Ad Occurrences with Minimal Information
Two percent of all ad occurrences                                                                                          (Plan Type and Premium), by Plan Type
                                                                                                                                            (National and Three Markets)
provided neither plan type nor premium
information.                                                                                                  Medicare Advantage Plans                              Medicare Prescription Drug Plans

                                                                                                                  Neither Plan Type nor Premium              Neither Plan Type nor Premium
among all Medicare advantage ad                                                                                                 8%                                        <1%

occurrences, 43 percent indicated both
the specific type of plan (e.g., HMO or
PPO) and premium information, while 36
percent indicated only plan type but no                                                                    Both Plan Type                                            Both Plan Type
                                                                                                                                                                                          Plan Type Only
                                                                                                            and Premium              Plan Type Only                   and Premium
premium information. Just 3 percent                                                                            43%                       36%                             18%                  82%

of Medicare advantage ad occurrences
provided premium but not plan type, and
eight percent provided neither plan type
nor premium information (Exhibit 8).                                                                                    Premium Only
                                                                                                                            13%
                                                                                                                                                               Premium Only
                                                                                                                                                                   <1%
                                                                                                                               n = 8,902                                           n = 2,865
We then looked exclusively at print ads
for Medicare advantage plans to see if              SOURCE: Kaiser/George Mason University analysis of VMS data, 2008.

specific plan type (e.g., HMO or PPO) was
included in the main body of the ad or in
fine print. nearly eight in ten print ad occurrences (79%) for Medicare advantage plans identified a specific plan
type; of these ad occurrences, 46 percent did so in fine print.

A n A n a l y s i s o f M e d i c a r e A d v a n t a g e a n d Pr e s c r i p t i o n D r u g P l a n A d v e r t i s i n g                          P I T C H I N G P R I VAT E M E D I C A R E P L A N S     5
R E S u LT S




Disclosing Network Restrictions. Medicare advantage plans, such as HMOs, typically have restrictions that
could limit enrollees’ access to certain providers. These restrictions can have important implications for
enrollees in terms of their ability to see certain doctors or to be admitted to certain hospitals, and could
ultimately impact their out-of-pocket spending (i.e., for out-of-network care). recognizing the importance
of these issues for consumers, the Centers for Medicare and Medicaid Services (CMS) suggests that Medicare
sponsors disclose information about the applicable restrictions and limitations to prospective enrollees in
marketing materials.2 according to the Guidelines, for example, CMS recommends that HMO marketing
materials say, “enrollees must receive all routine care from plan providers; care provided by an out-of-network
provider will not be covered by Medicare or the plan.” They also recommend that PFFS plans state that the
“doctor or hospital must agree to accept the plans’ terms and conditions prior to providing services, except
emergencies.”

To assess the extent to which ads for various Medicare advantage ads included the recommended language
at all, we focused on print ads, which allowed us to capture fine print — where such language is most often
found. Two-thirds (67%) of all Medicare advantage print ad occurrences (85% of HMO and 3% of PPO ad
occurrences) included a general statement indicating “restrictions and limitations may apply.” However, all of
these ad occurrences mentioned the general restriction statement in fine print.

none of the HMO ad occurrences included the specific disclosure statement recommended by CMS. by
contrast, all PFFS ads included CMS’ suggested statement specific for PFFS plans — again all in fine print.
In every instance, general or specific restrictions were conveyed in fine print, which may have been less
noticeable and more difficult for beneficiaries to read.

iii. consumers represented in medicare Plan ads

Medicare private plans are required to accept all Medicare beneficiaries, without regard to age or medical
history. Given this fact, it is relevant to consider the characteristics of people who are portrayed in
advertisements, as well as the activities in which the participants are engaged and the types of benefits they
describe. Of course, many factors may be considered by insurers and their advertising agencies in deciding
whom to include in the advertisements and which activities to depict.

This analysis examines the extent to which various types of Medicare beneficiary groups are (or are not)
represented in ads that contain human images. We do not attempt to identify target audiences, but recognize
that people may be influenced by the type of images they do or do not see in the ad as they consider whether
the Medicare plan suits them.

Presence of Racial/Ethnic Minority Beneficiaries. racial and ethnic minority beneficiaries were portrayed
in just over half of all ad occurrences with human images. Hispanics/Latinos were included in 22 percent
of ad occurrences having a human image. This percentage may under-represent the actual proportion of
Hispanics/Latinos in the advertisements because in another nine percent of occurrences it was not possible
to determine with certainty whether or not an individual of Hispanic/Latino ethnicity was present. Over
a quarter of ad occurrences in Miami/Fort Lauderdale, FL, featured Hispanic/Latino individuals, while
only 2 percent of the ad occurrences in Greensboro, nC did so. These findings reflect the race/ethnicity
composition of each market and may suggest that insurers are strategically reaching out to specific groups of
beneficiaries in the different markets.




6       P I T C H I N G P R I VAT E M E D I C A R E P L A N S   A n A n a l y s i s o f M e d i c a r e A d v a n t a g e a n d Pr e s c r i p t i o n D r u g P l a n A d v e r t i s i n g
                                                                                                                                                                                                  R E S u LT S




The Under-65 Disabled. Only three                                                            ExHiBit 9
percent of ad occurrences included
images of younger people with                                                                      Example of an Ad Promoting Plan Availability for the under-65 Disabled

disabilities — despite the fact
that 6 percent of all Medicare
beneficiaries are under age 65
and with permanent disabilities.22
Furthermore, less than one percent
of all ad occurrences mentioned the
disabled population on Medicare
explicitly. While only a small number
of Medicare ads addressed younger
people on Medicare with disabilities,
those that did provide a useful model
for how plan sponsors could reach out
to this population with great health                                                         SOUrCe: VMS, 2008.

care needs. For example, one ad for
a Medicare advantage plan provided
by Secure Horizons includes narration                                                        ExHiBit 10

that says the plan is committed to                                                                                             Selected Images in Medicare Plan Ads
seniors and all Medicare beneficiaries                                                                                               (National and Three Markets)

as it displays an image of a young                                                           Percent of ad occurrences portraying the following images:
adult male Medicare beneficiary with
paraplegia crossing the finish line                                                                                                              30%

in a wheelchair track competition                                                                                                                                     27%


(Exhibit 9).

Seniors With Apparent Medical
                                                                        14%
Needs. Images of seniors with
apparent medical needs or frailties                                                                                                                                                          9%

were not commonly featured in ads,                 3%
despite the fact that 38 percent of
Medicare beneficiaries have three              Younger            Medications/          Household                                                                    Social             Physically
                                            Disabled People      Seniors Taking          Activity/                                                                  Activity           Demanding
or more chronic conditions.23 even                                Medications              Hobby                                                                                         Activity
with the relatively new prescription
                                           NOTES: Some activities are counted in more than one category.
drug benefit, only 4 percent of all       SOURCE: Kaiser/George Mason University analysis of VMS data, 2008.
ad occurrences (and just 22 percent
of all Prescription drug Plan ad
occurrences) portrayed an individual
taking medications or an image of medications (Exhibit 10).

Activities Portrayed in Advertisements. While the majority of ad occurrences (64%) did not include images of
people engaged in a visible activity, approximately nine percent of all occurrences depicted seniors engaged
in physically strenuous activities, such as dancing, playing baseball, running, swimming, or chasing children
(Exhibit 11). nearly a third of ad occurrences (30%) featured beneficiaries engaged in household activities
or hobbies, such as cooking and gardening. nearly as many (27%) were partaking in social activities, such as
parties, playing games, and spending time with children or grandchildren.



A n A n a l y s i s o f M e d i c a r e A d v a n t a g e a n d Pr e s c r i p t i o n D r u g P l a n A d v e r t i s i n g                  P I T C H I N G P R I VAT E M E D I C A R E P L A N S       7
R E S U LT S




Celebrity Endorsements and Other                                   ExhIbIt 11
Messengers. In 98 percent of all
television, radio, and web ad occurrences,                                           Example of an Ad Targeting Physically Active Seniors

a narrator presented some of or the
entire message. In 50 percent of all ad
occurrences, an individual who was
portrayed as a Medicare beneficiary was
the messenger. Individuals who could be
identified as celebrities presented at least
some of the material in seven percent of
occurrences (Exhibit 12). It is interesting
that nearly all of these celebrity
endorsements (99.9%) were in ads for
Medicare Advantage programs. In
two percent of occurrences a presenter
gave a testimonial for the plan, and
                                                                   SOURCE: VMS, 2008.
again, nearly all were for Medicare
Advantage plans.

                                                                   ExhIbIt 12
IV. Ad Occurrences and Spending
                                                                                      Example of an Ad Utilizing a Celebrity Endorsement
Where and how insurers focus their
ad placements and advertising dollars
provides insights into their overall
marketing strategy. This last section
examines Medicare ad occurrences and
spending by plan type and market to
show Medicare beneficiaries’ potential
exposure to Medicare plan advertising
and estimated spending by plans to
advertise their products.

More than half of all ad occurrences
(n=7,491 or 57%) appeared nationally;
the remaining 43 percent of sample
ads did not appear nationally, but
appeared in at least one of the three
markets: Miami/Fort Lauderdale, FL
(n=2,167), Phoenix, AZ (n=1,526), and
Greensboro, NC (n=1,956). Therefore,
Medicare beneficiaries living in Miami/
Fort Lauderdale, FL, for example, were          SOURCE: VMS, 2008.

potentially exposed to up to 9,658
television, print, or radio ads during the
three-month period leading up to the 2008 plan year, the highest of the three cities included in the study
(Table 2). This amounts to an average of 104 occurrences per day in Miami/Fort Lauderdale, FL across the
three-month study period — a substantial marketing effort by Medicare insurers.


18	      P I T C H I N G P R I VAT E M E D I C A R E P L A N S 	    A n 	 A n a l y s i s 	 o f 	 M e d i c a r e 	 A d v a n t a g e 	 a n d 	 Pr e s c r i p t i o n 	 D r u g 	 P l a n 	 A d v e r t i s i n g
                                                                                                                                                                                                    R E S u LT S




between October , 2007 and december 3, 2007, the estimated cost of television, print and radio ad
occurrences by Medicare plan sponsors nationally and in the three media markets was $45.7 million, according
to VMS data (Table 3). This estimate includes ads for Medicare advantage plans, Medicare Prescription drug
Plans and Medicare supplemental insurance (Medigap) policies. In addition, VMS data estimated another
$30.7 million in the value of these ads that were placed in other markets throughout the country (not shown).
These figures present a conservative estimate of marketing expenditures because they do not include other
potentially significant costs associated with ads placed in all other markets throughout the country (but not
nationally), nor take into account production costs, costs associated with other marketing activities, such as
direct mail, seminars, agent fees, billboard and other open air placements, or ads placed on websites.


           taBLE 3: Expenditures for all medicare ad occurrences, by medium and market, oct. 1 – dec. 31, 2007
                                                                                    miami/Fort
                                                      national                    Lauderdale, FL                 greensboro, nc                Phoenix, aZ                        total
        TV                                         $33,082,870                        $,430,040                         $224,08               $,649,65                        $36,386,642
        Print                                        $,264,542                       $7,299,265                         $3,274                 $673,238                          $9,350,39
        radio                                                     $0                        $2,73                             $0                      $223                              $2,396
        totaL                                      $34,347,42                        $8,73,478                         $337,355               $2,323,2                        $45,739,357

        nOTe: analysis excludes expenditures for ads that appeared exclusively in local media markets other than Miami, Greensboro, and Phoenix ($30.7 million).
              dollars attributed to each market excludes costs associated with ads placed nationally.

        SOUrCe: Kaiser/George Mason University analysis of VMS data, 2008.




across the three markets, there was substantial variation in estimated expenditures for television, print, and
radio advertising for Medicare plans. estimated costs were close to four times more for ads placed in Miami/
Fort Lauderdale, FL ($8.7 million) than in Phoenix, aZ ($2.3 million), and were considerably less in Greensboro,
nC ($0.3 million). The higher spending
in Miami/Fort Lauderdale, FL and                  ExHiBit 13
Phoenix, aZ is correlated with more ad
occurrences than in Greensboro, nC and               Distribution of Medicare Ad Occurrences and Spending, by Plan Type
                                                                              (National and Three Markets)
the relatively higher cost of placing ads in
those media markets. The average cost               Total Occurrences = 13,140                     Total Spending = $45,739,357
for a TV occurrence in Greensboro, nC is
                                                                       Medigap
about $49, but $865 in Phoenix, aZ and                                  1%
                                                                                                                Medigap Plan Type
                                                                                                                   1%     Unknown
$766 in Miami/Fort Lauderdale, FL.                                           Plan Type Unknown
                                                                                     3%
                                                                                                                             2%

                                                                                                                                               Multiple
Occurrence and Spending, by Type                                                                                                              Plan Types                                           Multiple
                                                                                                                                                 7%                                               Plan Types
of Medicare Plan. during the three-                                                                       Medicare                                             Medicare
                                                                                                                                                                                                     2%

month period leading up to the 2008                                                                      Advantage
                                                                                                           68%
                                                                                                                               Prescription
                                                                                                                               Drug Plans
                                                                                                                                                              Advantage            Prescription
                                                                                                                                                                66%                Drug Plans
plan year, there were three times more                                                                                             22%                                                 30%

Medicare advantage than Medicare
Prescription drug Plan occurrences
(8,902 vs. 2,865 respectively). Spending
among corresponding firms is estimated                                                            NOTES: Plan type determined by coder and Medicare Compare. Data collected from VMS,
to have been more than twice as much                                                                     a media monitoring rm.
                                                                                                  SOURCE: Kaiser/George Mason University analysis of VMS data, 2008.
for Medicare advantage plan ads than
for Medicare Prescription drug Plan ads
($30. million vs. $3.7 million) (Exhibit 13).

A n A n a l y s i s o f M e d i c a r e A d v a n t a g e a n d Pr e s c r i p t i o n D r u g P l a n A d v e r t i s i n g                     P I T C H I N G P R I VAT E M E D I C A R E P L A N S         9
R E S u LT S




Likewise, Medicare plan sponsors                                 ExHiBit 14
allocated more resources to promote
Medicare advantage plans than                                        Distribution of Medicare Ad Occurrences, by Plan Type and by Market
Medicare Prescription drug Plans. Of
                                                                      1%                   2%                                                         3%            Plan Type Unknown
the nearly $46 million in estimated                                                                                               1%
                                                                                                               8%                                                   Multiple Plan Types
expenditures for ads placed nationally                                          30%                                                         30%                     Medigap
and in the three study markets,                                                                               31%
                                                                                                                                                                    Prescription Drug Plans
two-thirds (66%) of expenditures                                                                                                                                    Medicare Advantage
were for Medicare advantage plans
and 30 percent were for Medicare                                                68%                                                        66%
                                                                                                              60%
Prescription drug Plans. There
was relatively little variation in the
distribution of ad occurrences, by
plan type, across the three markets                               Miami/Fort Lauderdale, FL Greensboro, NC                           Phoenix, AZ
(Exhibit 14).                                                        9,658 occurrences     9,017 occurrences                      9,447 occurrences


among Medicare advantage ad                                      NOTES: Includes occurrences and expenditures for ads placed nationally and in the three
                                                                        study markets. Data collected from VMS, a media monitoring rm.
occurrences, nearly half (45%) were                              SOURCE: Kaiser/George Mason University analysis of VMS data, 2008.
for HMOs, 9 percent for PPOs, and
4 percent for Private Fee-for-Service
(PFFS) plans. We were unable to identify
                                                                 ExHiBit 15
specific plan type (e.g., HMO or PPO) for
2 percent of all Medicare advantage ad                               Distribution of Medicare Advantage Ad Occurrences and Spending,
                                                                                                 by Plan Type
occurrences — even after reviewing the
                                                                                                          (National and Three Markets)
plan and checking Medicare Compare,
                                                                       Total Occurrences = 8,902                                            Total Spending = $30,068,339
on the Medicare.gov website. In
many of these cases, the ad promoted                             Multiple MA Plan Types
                                                                                                                                          MA Plan Type Unknown
                                                                                                                                 Multiple MA       11%
plans from an insurer more generally,                                      5%
                                                                                                                                 Plan Types
rather than promoting a specific plan                                               MA Plan Type                                     5%
                                                                                     Unknown
type. expenditures tended to track                                                      21%
                                                                        PFFS
occurrences, with HMOs accounting for                                   14%                                                                 PFFS
                                                                                                                                             8%
57 percent of estimated expenditures,                                                               HMO                                                                  HMO
                                                                                                    45%                                                                  57%
followed by PPOs (9%) and PFFS plans                                       PPO
                                                                            19%
                                                                                                                                                  PPO
                                                                                                                                                  19%
(8%) (Exhibit 15).

The distribution of ad occurrences by
Medicare advantage Plan type varied               NOTES: Plan type determined by coder and Medicare Compare. Data collected from VMS,
                                                         a media monitoring rm.
across the three markets. In Greensboro,
                                                  SOURCE: Kaiser/George Mason University analysis of VMS data, 2008.
nC nearly one in five Medicare
advantage ad occurrences were for a
PFFS plan, compared to about one in ten
Medicare advantage plan ad occurrences in Miami/Fort Lauderdale, FL. When national ad occurrences were
excluded from the analysis, the variations across markets were even more striking based on ads that were
strategically placed in the three markets. One-third of all non-national Medicare advantage ads that appeared
in Greensboro, nC during the three-month period leading up to the 2008 plan year were for PFFS plans, as
compared to 2 percent of non-national Medicare advantage ads appearing in Phoenix, aZ and zero percent
in Miami/Fort Lauderdale, FL.



20       P I T C H I N G P R I VAT E M E D I C A R E P L A N S      A n A n a l y s i s o f M e d i c a r e A d v a n t a g e a n d Pr e s c r i p t i o n D r u g P l a n A d v e r t i s i n g
                                                                                                                                                                                               R E S u LT S




a relatively large share of all non-                                                               ExHiBit 16
national Medicare advantage plans did
not identify plan type, with the highest                                                                  Distribution of Medicare Advantage Ad Occurrences, by Plan Type
                                                                                                                                    and by Market
share of such ad occurrences in Miami/
                                                                                                           Including National Occurrences               Excluding National Occurrences
Fort Lauderdale, FL (5%), followed by
                                                                                                                               6%      10%
Phoenix, aZ (40%) and then Greensboro,                                                                     15%
                                                                                                                               20%     16%                              38%
                                                                                                          12%                                                                           40%
nC (38%) (Exhibit 16).                                                                                                                                  51%
                                                                                                                               23%     20%                      2%
                                                                                                          26%
Estimated Spending, by Plan Sponsors.                                                        2%
                                                                                                                                  12%
                                                                                                                       34%
VMS estimates of spending were used to                                              54%
                                                                                                      22%
                                                                      51%
                                                                                                                                  48%
analyze expenses associated with each                47%
                                                                                                                      26%
                                                                                                      25%
ad occurrence during the three-month
study period, both nationally and in the          Miami/Fort
                                                 Lauderdale, FL
                                                                  Greensboro,
                                                                       NC
                                                                                 Phoenix,
                                                                                     AZ
                                                                                                   Miami/Fort      Greensboro,  Phoenix,
                                                                                                 Lauderdale, FL         NC         AZ
three markets (Table 4). aarP sponsored              6,602            5,411        6,189              1,952             761       1,539
                                                  occurrences      occurrences occurrences         occurrences     occurrences occurrences
more ads and outspent competitors in
the national market by a wide margin,                Multiple Plan Types      Plan Type Unknown          PPO             PFFS        HMO

with estimated spending of more than            NOTES: Plan type determined by coder and Medicare Compare. Data collected from VMS,
                                                        a media monitoring rm.
$22 million. This figure was more than
                                                SOURCE: Kaiser/George Mason University analysis of VMS data, 2008.
twice as much as its closest competitor,
Humana ($9.5 million). In Miami/Fort
Lauderdale, FL, Humana topped the list,
followed by Care Plus, and Preferred Care Partners. In Phoenix, aZ Health net exceeded all other companies in
Medicare ad expenditures, followed by Humana and aarP. In Greensboro, nC anthem blue Cross /blue Shield
outspent its competitors.

                                                     taBLE 4: medicare ad Spending, by company and by market

                                                     national                                                                                 greensboro, nc
         aarP/Secure Horizons                                            $22,47,693.00                            blue Cross blue Shield                               $5,383
         Humana                                                                $9,507,047                          aarP/Secure Horizons                                   $95,990
         Colonial Penn                                                         $2,239,064                          Humana                                                 $43,702
         Health net                                                              $2,07                          Colonial Penn                                          $37,380
         Total Care                                                                $7,537                         Health Market Care assured                              $6,573

                                       miami/Fort Lauderdale, FL                                                                                Phoenix, aZ
         Humana                                                                $2,237,670                          Health net                                           $699,465
         Care Plus                                                             $,537,38                          Humana                                               $36,755
         Preferred Care Partners                                               $,490,683                          aarP/Secure Horizons                                 $355,693
         aV Med                                                                  $706,707                          abrazo advantage                                     $93,472
         Citrus Health Care                                                      $597,32                          Cigna Health Care                                    $47,743

         nOTeS: Listed expenditures are estimated values.

         SOUrCe: Kaiser/George Mason University analysis of VMS data, 2008.




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R E S u LT S




Television Ads Aired Most Frequently. We looked at the top ten television ads that aired during the three-
month period leading up to the 2008 plan year, based on ad occurrences that appeared nationally and in the
three markets (table 5). Seven of the top ten television ads were for Medicare advantage plans and three
were for Medicare Prescription drug Plans. Of the seven Medicare advantage plan ads, two were for PFFS
plans (Humana Plan Choice and Colonial Penn’s advantra Freedom Plan) and five were for Medicare HMOs.

                                     taBLE 5: top ten television ad occurrences, by company and market

                      company                                    Plan type                                   market                                           occurrence
        aarP/United Healthcare                         Prescription drug Plan (PdP)                         national                                              459
        Humana                                         Medicare advantage – PFFS                            national                                              262
        Colonial Penn                                  Medicare advantage – PFFS                            national                                              035
        aarP/Secure Horizons                           Medicare advantage – HMO                             national                                                944
        aarP/Secure Horizons                           Medicare advantage – HMO                             national                                                838
        blue Cross and blue Shield of nC               Medicare advantage – HMO                        Greensboro, nC                                               763
        aarP/Secure Horizons                           Medicare advantage – HMO                             national                                                76
        aarP/Secure Horizons                           Prescription drug Plan (PdP)                         national                                                632
        Humana                                         Prescription drug Plan (PdP)                         national                                                537
        Health net                                     Medicare advantage – HMO                           Phoenix, aZ                                               325

        SOUrCe: Kaiser/George Mason University analysis of VMS data, 2008.




diScuSSion

Findings from this study provide new insights that help explain how health insurers attempt to inform and
influence Medicare beneficiaries’ health coverage decisions through advertising. First, as expected, extra
benefits and dollar savings topped the list of leading messages used to attract consumers, suggesting that
health insurers recognize the importance of savings for Medicare beneficiaries who generally live on fixed
incomes and are often concerned about the financial burden of medical care. Second, ads for Medicare plans
tend to include fairly minimal descriptive information to help inform health insurance choices, often omitting
important plan features like plan type and monthly premium, which could significantly affect beneficiaries’
access to medical providers and out-of-pocket spending. Third, insurers appear to be reaching out to a
more racially and ethnically diverse group of Medicare beneficiaries; however, consistent with prior research,
insurers tend to devote relatively little advertising attention to certain segments of the Medicare population,
such as the under-65 disabled and seniors with serious medical needs, groups for whom health insurance
choices are especially important. and finally, Medicare plan sponsors devoted substantially more advertising
dollars to Medicare advantage plans than to Medicare Prescription drug Plans, which may reflect a decision to
maximize enrollment among plans that are relatively profitable under the current payment system.24

Together, these findings raise, but do not necessarily answer, important questions about the appropriate role of
advertising within the context of the Medicare program. Given the emergence of private plans in Medicare, the
strong influence of advertising on consumer behavior, the physical and cognitive limitations of many people on
Medicare, and the fact that most products advertised by Medicare insurers are primarily paid for by the federal
government, the advertising activities of Medicare insurers remain an important matter for policymakers in
their discussions about the role of private plans in Medicare. Policymakers may want to consider the extent to
which ads for Medicare plans could or should be used more effectively to educate consumers about important
plan features, and to reach out to all segments of the Medicare population.


22       P I T C H I N G P R I VAT E M E D I C A R E P L A N S                 A n A n a l y s i s o f M e d i c a r e A d v a n t a g e a n d Pr e s c r i p t i o n D r u g P l a n A d v e r t i s i n g
aPPEndix


dEtaiLEd mEtHodoLogy

ads for private Medicare plans were monitored and analyzed during the period between October , 2007
and december 3, 2007 to understand how plan sponsors attempted to influence beneficiaries’ health care
coverage decisions for 2008. a multi-stage data-gathering strategy was employed to identify newspaper,
radio and television ads. VMS, a commercial media monitoring service, was retained to monitor and record
print, radio and television ads that appeared nationally and in three media markets (Phoenix, aZ, Miami/
Fort Lauderdale, FL, and Greensboro, nC). These markets were selected for their geographical diversity and
varying levels of Medicare private plan penetration (See Table ). Phoenix, aZ is a large and mature market
for Medicare insurance. Miami/Fort Lauderdale, FL is a medium-sized mature Medicare insurance market.
Greensboro, nC by contrast, is a smaller yet emerging market for Medicare private plans, particularly Private
Fee-for-Service plans. VMS monitored seven broadcast networks (abC, CbS, nbC, FOX, CW, Paxnet, My
network), 65 cable networks, 45 newspapers (5 in Miami/Fort Lauderdale, FL, 22 in Phoenix, aZ and eight in
Greensboro, nC),  magazines, and 48 local radio stations in Phoenix, aZ and Miami/Fort Lauderdale, FL (See
appendix Table a for a complete listing).

VMS identified and recorded 24 distinct newspaper/magazine ads, 50 distinct television ads, 3 distinct radio
ads. The original study design envisioned analyzing a wider range of marketing materials, including seminars,
websites, outdoor media, direct mail and solicited mail. Unfortunately, we were unable to incorporate these
marketing activities in the final analysis due to unforeseen limitations in data collection from these sources.

Solicited Mail. research assistants were hired within the three targeted metro areas to contact local Medicare
insurers and request print materials on the various insurance plans available in the area be sent to a local post
office box. about 85 health plans were contacted for materials, yet only 27 responded to the inquiry. due to
the low response rate by market, we were unable to include these in our analysis.

Seminars. The research assistants also inquired about and attended local marketing seminars and events in
their areas, in an effort to document content material and to capture promotional print materials distributed.
after many of the scheduled seminars were canceled by the local insurers, only five informational seminars
were attended by the local research assistants. We think the widespread cancellation of marketing seminars
may have been a result of increased scrutiny by the Centers for Medicare and Medicaid Services on health
insurers marketing practices to the Medicare population, which included secret shoppers (including Kerry
Weems, acting administrator of CMS) attending seminars to monitor Medicare marketing practices.25

Outdoor Media. While outdoor media is one of the many vehicles used by insurers to advertise, the VMS
monitoring service did not identify any outdoor media ads in the three markets during the study period.

Websites, Web-based Ads, and Direct Mail. The original study envisioned an analysis of websites for all
Medicare plans in the sampling frame. However, the final study did not analyze websites, web-based ads
nor direct mail due to the vast scope of the internet and variations in websites, as well as limited receipt of
direct mail.




A n A n a l y s i s o f M e d i c a r e A d v a n t a g e a n d Pr e s c r i p t i o n D r u g P l a n A d v e r t i s i n g   P I T C H I N G P R I VAT E M E D I C A R E P L A N S   23
APPENDIX




Coding Television, Print and Radio Ads. a content coding sheet was developed to assess and document the
key elements of advertising content: marketing strategy; eligibility requirements; benefits, financial costs, and
restrictions; ways to establish contact with the HMO; and layout and design, including type size and images.
The coding sheet was designed to capture the presence or absence of specific elements, thus minimizing the
need for qualitative judgments. (The coding sheet is available from authors, by request). Three researchers
coded all ads; inter-rater reliability for all content categories overall exceeded 95 percent for content and
imagery. all data were entered into a Statistical Package for the Social Sciences (SPSS) database for tabulation
and analysis.

To ensure each ad was coded correctly for plan type, we recoded every ad in the sample for plan type
based on the following methodology. First, each ad was coded for the general plan type according to the
following categories: Medicare advantage plan, Medicare health plan, Medicare drug plan, and Medigap/
Medicare supplement plan. Where ads used the exact phrases “Medicare advantage,” or “Medicare Health
Plan,” ads were coded accordingly. ads mentioning “stand-alone prescription drug plan,” “Medicare rx plan,”
“Prescription drug Plans,” or “Part d plan” were coded as “Medicare drug Plan”. ads that mentioned multiple
types of Medicare plans offered by a company were coded as a “mix of Medicare plans mentioned.” If an ad
could not be classified into these categories or did not specify the type of plan being advertised, it was coded
as “no identification of the nature of the plan.”

Medicare advantage ads were classified based on specific type of plan (HMO, PPO, PFFS plan). If multiple plan
types were mentioned in the ad, each specific plan type identified was coded, as was the category, “mix of
Medicare advantage or Medicare health plans”. For example, an ad that included a few different plans offered
by the company would be coded for each specific type of plan identified (e.g., HMO, Private Fee-for-Service)
as well as “mix of Medicare advantage or Medicare health plans”. Where ads identified the type of plan being
advertised in the fine print, ads were coded for the type of plan(s) specified, and marked to indicate the
identification only appeared in the fine print. When no specific type of plan was identified anywhere in the ad,
it was coded as “no specification of plan type”.

ads that were coded as “no identification of the nature of the plan” or “no specification of plan type”
underwent a second recode process in which we used the Centers for Medicare and Medicaid Services (CMS)
Medicare Compare web tool to further identify the plan type for each ad, based on the name of the plan
featured in the ad. ads that did not disclose information beyond company name were not able to be further
identified and remained coded as “no identification of the nature of the plan”.

Variables from the content coding sheet were used to create composite summary variables to define main
messages that appeared in ads (See appendix Table a2).

Spending and Occurrence Data. Spending and occurrence data provided by VMS were also collected and
analyzed for all ads captured during the study time frame. VMS television occurrence and expenditure
data were provided by nielsen Monitor Plus. SQad broadcast cost data were used to estimate commercial
values by both nielsen and VMS. VMS provided estimates of commercial values for every occurrence as it
aired based on historical nielsen ratings and SQad television cost data. VMS estimates were replaced when
nielsen Monitor Plus’ final estimates of occurrence value were available (usually within 3 to 7 weeks). VMS’
radio supplier, Media Monitors, used audio pattern recognition technology to identify radio commercials and
their occurrences across 30 markets. VMS estimated dollar values for all radio occurrences based on historical
arbitron ratings data and SQad radio cost data. VMS reported spending data for radio and other local media
by dMa. Print occurrence data were captured as part of the VMS ad identification and scanning process.
relevant size and position data were captured for every occurrence of an ad in every publication. Occurrence
valuation was based on published open rates and assumed a 20 percent discount for all publications.


24   P I T C H I N G P R I VAT E M E D I C A R E P L A N S   A n A n a l y s i s o f M e d i c a r e A d v a n t a g e a n d Pr e s c r i p t i o n D r u g P l a n A d v e r t i s i n g
                                                                                                                                                                               APPENDIX




                                                         taBLE a1: television, Print, and radio Sources monitored

                                                                                                        tELEviSion
 7 BroadcaSt nEtworKS
    abC, nbC, CW, CbS, FOX, Paxnet, My network.
 65 caBLE nEtworKS
    a&e, abC Family Channel, adult Swim network, aMC, animal Planet, bbC america, beT, biography Channel, bravo, Cartoon network, CnbC,
    Cnn, Cnn Headline news, Comedy Central, Country Music Television, Court TV, discovery Channel, discovery Health, discovery Times Channel,
    e! entertainment Television, eSPn, eSPn2, eSPn news, Fox news Channel, FUSe, FX Channel, G4, Galavision, Golf Channel, GSn, Hallmark, HGTV,
    History Channel, History International, Lifetime, Lifetime Movie network, Military Channel, MSnbC, MTV, MTV2, national Geographic Channel, nick
    at nite, nickelodeon, nicktoons network, noggin, Oxygen network, Science Channel, SCIFI, Soapnet, Speed Channel, Spike TV, Style, Superstation
    WGn, TbS, TLC, TnT, Toon disney, Travel Channel, TV Food network, TV Guide Channel, TV Land, USa, VerSUS, VH, Weather Channel.

                                                                                                    radio marKEtS
 PHoEnix, aZ
    KdVa-FM, KeSZ-FM, KFyI-aM, KGMe-aM, KHOT-FM, KKFr-FM, KPKX-FM, KLnZ-FM, KMLe-FM, KMXP-FM, KOOL-FM, KOy-aM, KSLX-FM, KTar-aM,
    KUPd-FM, KyOT-FM, KZOn-FM, KZZP-FM, KOMr-FM, KdKb-FM, KnIX-FM, KTar-FM, KVIb-FM, KedJ-FM.
 miami/Fort LaudErdaLE, FL
    WLyF-FM, WrTO-FM, WaMr-FM, WaQI-aM, WbGG-FM, WCMQ-FM, Wedr-FM, WFLC-FM, WHQT-FM, WHyI-FM, WInZ-aM, WIOd-aM, WKIS-FM, WLVe-
    FM, WMGe-FM, WMIb-FM, WMXJ-FM, WPOW-FM, WQaM-aM, WQba-aM, WrMa-FM, WXdJ-FM, WaXy-aM, WHdr-FM, WSUa-aM.

                                                                                                            Print
 PHoEnix, aZ
    Newspapers: Arizona Central, Arizona Business Gazette, The Ahwatukee Foothills News, Arizona Capital Times, Arizona Republic, Asian American Times,
    Business Journal, Catholic Sun, Chandler Connection, Desert Advocate, East Valley Tribune, Jewish News of Greater Phoenix, La Voz, Livin’ Life After 50,
    The Maricopa Connection, Northeast Phoenix Independent, Prensa Hispana, Arizona Informant, Business Journal of Phoenix, Jewish News of Greater
    Phoenix, Phoenix New Times, Phoenix Gazette.
    Magazines: Quality Life Magazine, AARP, Arizona Highway, Desert Living, Phoenix Home/Garden.
 grEEnSBoro, nc
    Newspapers: News & Record, Business Journal, Rhinoceros Times, Carolina Peacemaker, Yes! Weekly, La Conexion, Que Pasa, Hamburger Square Post.
    Magazines: Bizlife Magazine, Our State Down Home in North Carolina, Fifty Plus, AARP, Senior Living Resources.
 miami/Fort LaudErdaLE, FL
    Newspapers: Sun-Sentinel, Miami Herald, City Link, New Times Broward-Palm Beach, Broward Daily Business Review, Broward Times, Waterfront News,
    City Link, El Heraldo South, El Sentinel, Neuvo Herald, Hi-Riser, Westside Gazette, The Boomer Times & Senior Life, Jewish Journal, Broward News and
    Broward Senior News.
    Magazines: Senior Connection & Mature Lifestyle, Business in Broward, AARP.

 SOUrCe: VMS, 2008.




A n A n a l y s i s o f M e d i c a r e A d v a n t a g e a n d Pr e s c r i p t i o n D r u g P l a n A d v e r t i s i n g   P I T C H I N G P R I VAT E M E D I C A R E P L A N S   25
APPENDIX




                           taBLE a2: composition of Summary variables used to define main messages

                    Summary variable                                                             components of Summary variable
Access to Pharmacists                                        access to large network of pharmacists

Access to Providers                                          nationwide coverage/Coverage that goes wherever you go; access to out-of-network
                                                             providers or no network restrictions; See your own doctor/See any doctor/Freedom to
                                                             choose doctors/no need to switch doctors; Large/broad network of doctors; no referrals
                                                             needed to see specialists

All-in-one Plan                                              Comprehensive “all-in-one” plan

Brand Recognition                                            emphasis on company’s brand name

Comparison to other Plans                                    benefits better than other plans

Comparison to original Medicare                              benefits better than Traditional Medicare

Confusing/Need to Simplify                                   Simple/easy to use plan; Makes it less confusing/simplifies choice

Extra Benefits                                               Covers preventive care; Vision; eyeglasses; dental; Hearing; Hearing aids; 24-hour nurse
                                                             line; Transportation; Health coaches; Care management; Health and needs assessment;
                                                             Health education classes/Wellness programs; Health club/Fitness membership; Meals on
                                                             Wheels services after hospitalization; Special services for people with specific conditions;
                                                             Immunization; Smoking cessation programs; Health products

Excellent Service                                            Long history of services with Medicare/experience; High quality medical care/services;
                                                             Personal touch/Speak to real people/Friendship/Personal relationship with customers;
                                                             Knowledgeable customer service staff; requires little or no paperwork/Claims or automatic
                                                             claim services

Low Cost-Sharing                                             Low copays (doctor’s visits/specialists/hospital stays/urgent care); Limit on out-of-pocket
                                                             spending; Specific copay indicated

Low Drug Costs                                               no drug deductible; Low drug deductible; no copay for drugs; Low cost-sharing or copay
                                                             for drugs

Low/No Premium                                               no (extra) premium for drugs; Zero premium; Low monthly premium/Competitive premium
                                                             (not Part b premiums); reduced Part b premium/buy down Part b premium; Specific
                                                             premium indicated

Mail order Pharmacy Services                                 Offers mail order services

Peace of Mind                                                Peace of Mind/Company will take care of everything; you can “count on us”/dependable
                                                             coverage/reliable coverage

Predictable Costs                                            Predictable copayments/cost

Rx Coverage                                                  Open/Comprehensive Formulary; Covers “generics” or unlimited generic drugs or no copay
                                                             for preferred generic drugs; Covers brand drugs

Satisfied Customers and Wide Customer Base                   Wide customer base; Have satisfied, loyal customers

Save Money                                                   Save money/Get more for what you pay/affordable/Fit your budget

Savings for People with Low-Incomes                          big savings for people with low-incomes/May reduce drug premiums and costs for people
                                                             who qualify for low-income subsidy or extra help

Variety of Plans                                             a variety of plans available to suit beneficiary’s needs/One stop shopping




26   P I T C H I N G P R I VAT E M E D I C A R E P L A N S             A n A n a l y s i s o f M e d i c a r e A d v a n t a g e a n d Pr e s c r i p t i o n D r u g P l a n A d v e r t i s i n g
                                                                                                                                                                                            APPENDIX




                                          taBLE B: Percentage of ad occurrences by main message and Plan type
                                                                                                                                medicare
                                                                                                   multiple Plan               drug Plans    medicare                                    Plan type
                                                                                total                 types                      (PdPs)     advantage              medigap               unknown
 on Plan Benefits                                                           n= 13140                    n=908                   n=2865        n=8902                 n=120                 n=345
 Low or no Premium                                                              43%                        %                     8%            56%                   0%                   30%
 Low drug Cost                                                                  8%                        0%                     82%            0%                    0%                    0%
 Low Cost-Sharing                                                               27%                       99%                     0%             29%                   0%                   30%
 Save Money                                                                     35%                       84%                     27%            34%                   %                    0%
 Savings for People with Low-Incomes                                             6%                        0%                     0%             9%                    0%                    0%
 rx Coverage                                                                    27%                        %                     82%            2%                   0%                   35%
 Mail Order Pharmacy Services                                                    6%                        0%                     27%            0%                    0%                    0%
 Predictable Costs                                                              37%                        0%                     22%            47%                   0%                    0%
 Variety of Plans                                                               39%                       85%                     73%            26%                   0%                    0%
 Confusing/need to Simplify                                                     36%                        0%                     73%            28%                   %                   37%
 all-in-One Plan                                                                29%                        0%                     0%             43%                   0%                    0%
 Comparison to Other Plans                                                       8%                        0%                     22%            5%                    0%                    0%
 Comparison to Original Medicare                                                22%                        0%                     0%             32%                   0%                   4%
 extra benefits                                                                 50%                       4%                     0%             7%                   0%                   39%
 access to Providers                                                            36%                        0%                     22%            46%                   %                    0%
 access to Pharmacies                                                           20%                        0%                     9%            0%                    0%                    0%
 brand recognition                                                              42%                        0%                     73%            38%                   2%                    0%
 Peace of Mind                                                                  0%                        2%                     22%            6%                    0%                   30%
 Satisfied Customers/Wide Customer base                                          %                        0%                     0%             %                    %                    0%
 excellent Service                                                              28%                        %                     49%            24%                   %                   30%

 (continued on the following page)




A n A n a l y s i s o f M e d i c a r e A d v a n t a g e a n d Pr e s c r i p t i o n D r u g P l a n A d v e r t i s i n g                P I T C H I N G P R I VAT E M E D I C A R E P L A N S    27
APPENDIX




                         taBLE B: Percentage of ad occurrences by main message and Plan type (continued)
                                                                 total
                                                                medicare                                                                               mix of ma               ma Plan type
                                                               advantage     Hmo                       PFFS                       PPo                  Plan type                unknown
on Plan Benefits                                                n=8902     n=4022                    n=1232                    n=1690                      n=67                    n=1891
Low or no Premium                                                56%          65%                       94%                        %                       45%                       62%
Low drug Cost                                                     0%           0%                        0%                        0%                        9%                        %
Low Cost-Sharing                                                 29%           9%                        0%                       75%                       33%                       50%
Save Money                                                       34%          24%                       6%                       84%                        0%                       26%
Savings for People with Low-Incomes                               9%          2%                        0%                        0%                        0%                        0%
rx Coverage                                                      2%          %                        0%                        0%                        5%                       32%
Mail Order Pharmacy Services                                      0%           %                        0%                        0%                        0%                        0%
Predictable Costs                                                47%          39%                       85%                       75%                        2%                       7%
Variety of Plans                                                 26%          37%                        0%                        0%                       42%                       42%
Confusing/need to Simplify                                       28%          47%                        0%                       24%                       28%                        7%
all-in-One Plan                                                  43%          55%                       6%                       75%                        6%                        7%
Comparison to Other Plans                                         5%           0%                        0%                       5%                        5%                       0%
Comparison to Original Medicare                                  32%          26%                       6%                       75%                        5%                       7%
extra benefits                                                   72%          57%                      00%                       76%                       5%                       79%
access to Providers                                              46%          29%                       94%                      00%                       25%                        %
access to Pharmacies                                              0%           0%                        0%                        0%                        0%                        0%
brand recognition                                                38%          84%                        0%                        0%                        5%                        0%
Peace of Mind                                                     6%           2%                        0%                        9%                        3%                       5%
Satisfied Customers/Wide Customer base                            %           0%                        0%                        0%                        3%                        5%
excellent Service                                                24%           3%                       6%                       76%                        8%                       30%

SOUrCe: Kaiser/George Mason University analysis of VMS data, 2008.
nOTe: Ma = Medicare advantage




28     P I T C H I N G P R I VAT E M E D I C A R E P L A N S               A n A n a l y s i s o f M e d i c a r e A d v a n t a g e a n d Pr e s c r i p t i o n D r u g P l a n A d v e r t i s i n g
EndnotES
  Medicare Payment advisory Commission. (2008). report to the Congress: Medicare Payment Policy. Washington, dC.

 2 Ibid.

 3 Congressional budget Office, 2008.

 4 Medicare advantage news, March 2008.

 5 Pear, r. (2005, June 5). Medicare officials insisting on wider choices in drug benefits. new york Times. retrieved March 24, 2008 from
   http://www.nytimes.com/2005/06/5/health/5drug.html?scp=&sq=Medicare+officials+insisting+on+wider+choices+in+drug+benefits&st=nyt.

 6 borer, elizabeth Canney, (2008). Modernizing Medicare: Protecting america’s Most Vulnerable Patients from Predatory Health Care Marketing Through accessible Legal remedies” .
   Minnesota Law review, Vol. 92, no. 4. available at SSrn: http://ssrn.com/abstract=092688.

 7 California Health advocates/Center for Medicare advocacy/Medicare rights Center (2008, March). Letter to the Honorable Max baucus and the Honorable Charles Grassley
   about improper marketing practices by Medicare advantage plans and prescription drug plans. retrieved March 24, 2008 from http://www.medicareadvocacy.org/Ma_08.03.2.
   MarketingLetter.pdf. national association of Insurance Commissioners (2008, May 8). naIC urges stronger Medicare regulation. Press release. retrieved May 8, 2008 from
   http://www.naic.org/releases/2008_docs/medicare_stronger_federal_regulation.htm. United States Senate, Committee on Finance. (2008, February 7 and February 3) Selling to
   seniors: the need for accountability and oversight of marketing and sales by Medicare private plans.

 8 as this report was going to press, the Office of Inspector General released a study, “Marketing Materials for Medicare Prescription drug Plans,” that assessed CMS’ oversight of marketing
   materials for prescription drug plans and found some materials to be inconsistent with CMS marketing guidelines. Marketing materials were also found to omit pertinent information
   for enrollees regarding the low-income subsidy. For more on the OIG report, http://www.oig.hhs.gov/oei/reports/oei-0-06-00050.pdf.

 9 Mehrotra, a., Grier, S., & dudley, r.a. (2006). The relationship between health plan advertising and market incentives: evidence of risk-selective behavior. Health affairs, 25(3), 759-765.
   neuman, P., Maibach, e., dusenbury, K., Kitchman, M., & Zupp, P. (998). Marketing HMOs to Medicare beneficiaries. Health affairs, 7(4), 32-39.

0 Medicare Improvements for Patient and Providers act of 2008 (Public Law 0-275).

 national association of Insurance Commissioners (2008, May 8). naIC urges stronger Medicare regulation. Press release. retrieved May 8, 2008 from http://www.naic.org/
   releases/2008_docs/medicare_stronger_federal_regulation.htm. United States Senate bill S.30 and House of representatives bill H.F. 633, June 2008.

2 Center for Medicare and Medicaid Services (2008, May 8). CMS proposed new protections for Medicare beneficiaries in Medicare advantage and prescription drug programs. Press
   release, retrieved May 8, 2008 from http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=3096&intnumPerPage=0&checkdate=&checkKey=&srchType=&numdays=350
   0&srchOpt=0&srchdata=&keywordType=all&chknewsType=%2C+2%2C+3%2C+4%2C+5&intPage=&showall=&pyear=&year=&desc=&cboOrder=date.

3 Thames, b. (2008, Feb 28) Testimony before the Subcommittee on Health of the United States House Committee on Ways and Means on Medicare advantage.

4 Perry, M., dulio, a., & Cubanski, J. (2006, december). Voices of beneficiaries: Medicare Part d insights and observations one year later. Prepared for the Kaiser Family Foundation,
   Washington, dC. retrieved May 8, 2008 from http://www.kff.org/medicare/7605.cfm.

5 Cubanski, J. Medicare drug benefit Choices: Knowledge and Consumer behavior among Medicare beneficiaries. Presentation at 2008 academyHealth annual research Meeting.
   Washington, dC: June 9, 2008. Perry, M., dulio, a., & Cubanski, J. (2006, april). Voices of beneficiaries: early experiences with the Medicare drug benefit. Prepared for the Kaiser Family
   Foundation, Washington, dC. retrieved May 8, 2008 from http://www.kff.org/medicare/7504.cfm.

6 Fung, H. H., & Carstensen, L. L. (2003). Sending memorable messages to the old: age differences in preferences and memory for advertisements. Journal of Personality and Social
   Psychology, 85, 63-78.

7 Williams, S. S., & Koepke, C. P. (2006). Using multiple methods to identify theme lines for media marketing campaigns to promote Medicare information sources. Journal of Consumer
   Marketing, 23, 35-356.

8 davis, r. H., & Kubey, r. W. (982). Getting old on and with television. In d. Pearl, L. bouthilet, & J. Lazar (eds.), Television and behavior: Ten years of scientific progress and implications
   for the eighties, Vol. 2, Technical reviews (pp. 20-208). national Institute of Mental Health. Washington, d.C.: U.S. Government Printing Office. (dHHS Publication no. adM 82-96.)
   Kubey, r. W. (980). Television and aging: Past, present, and future. Gerontologist, 20, 6-35. Kubey, r. W. (98). Mass media and aging. In r. davis, (ed.), aging: Prospects and
   issues (4th edition) (pp. 342-36). University of Southern California Press. Kubey, r., & Csikszentmihalyi, M. (2002, Feb.). Television addiction is no mere metaphor. Scientific american,
   286, 74-80. McIlwraith, r., Jacobvitz, r. S., Kubey, r., & alexander, a. (99). Television addiction: Theories and data behind the ubiquitous metaphor. american behavioral Scientist,
   35, 04-2. rubin, a.M., & rubin, r.b. (982) Contextual age and television use. Human Communication research 8 (3), 228–244. Van der Goot, M., beentjes, J.W.I., & Van Selm, M.
   (2006). Older adults’ Television Viewing from a Life-Span Perspective: Past research and Future Challenges. In C. beck (ed.). Communication yearbook 30, (pp. 43-469). Hillsdale, nJ:
   Lawrence erlbaum associates.

9 Marsha Gold for the Kaiser Family Foundation, “Premiums and Cost-Sharing Features in Medicare’s new Prescription drug Program, 2006,” May 2006.

20 Perry, M., dulio, a., & Cubanski, J. (2006, december). Voices of beneficiaries: Medicare Part d insights and observations one year later. Prepared for the Kaiser Family Foundation,
   Washington, dC. retrieved May 8, 2008 from http://www.kff.org/medicare/7605.cfm.

2 Centers for Medicare and Medicaid Services Medicare Marketing Guidelines for: Medicare advantage Plans, Medicare advantage Prescription drug Plans, Prescription drug Plans, and
   976 Cost Plans.

22 Kaiser Family Foundation analysis of the 2006 Medicare Current beneficiary Survey, access to Care file.

23 Kaiser Family Foundation analysis of the 2006 Medicare Current beneficiary Survey, access to Care file.

24 Medicare Payment advisory Commission. (2008). report to the Congress: Medicare Payment Policy. Washington, dC.

25 Testimony of Kerry Weems, acting administrator to Centers for Medicare and Medicaid Services (CMS) before the Senate Finance Committee on “Selling to Seniors: The need for
   accountability and Oversight of Marketing by Medicare Private Plans, Part 2,” February 3, 2008.




A n A n a l y s i s o f M e d i c a r e A d v a n t a g e a n d Pr e s c r i p t i o n D r u g P l a n A d v e r t i s i n g        P I T C H I N G P R I VAT E M E D I C A R E P L A N S        29
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